The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
Democratic presidential nominee Kamala Harris is making housing a focal point of her campaign, proposing ambitious plans to address rising costs that have made home ownership increasingly unattainable for many Americans. Amid economic concerns dominating voters' minds, Harris's housing policy aims to tackle the U.S. housing shortage through a mix of tax incentives and government initiatives, reflecting her commitment to easing the financial strain on households.
Key Takeaways:
Ambitious Housing Goals: Harris has proposed building three million additional housing units over four years, in addition to the one million typically constructed annually by the private sector. Her plan includes a new tax credit for developers who build homes targeted at first-time buyers, as well as a $25,000 tax credit for those buyers. This initiative is part of a broader strategy to increase affordable housing, streamline regulations, and expand rental assistance.
Economic and Political Context: Housing costs rank as the second-most pressing economic concern for voters, according to a Reuters/Ipsos poll, making this a pivotal issue in the upcoming election. With U.S. home prices rising 50% and rents 35% over the past five years, largely due to pandemic-driven material shortages and rising interest rates, Harris's focus on housing could resonate strongly with voters.
Challenges in Implementation: While Harris's proposals could attract voter support, implementing them may prove challenging. The estimated cost of her housing policies is at least $200 billion over 10 years, according to the Committee for a Responsible Federal Budget. Similar proposals from President Joe Biden have struggled to gain traction in Congress, suggesting that even if Harris wins the presidency, enacting these policies could be difficult.
In contrast, Republican candidate Donald Trump has proposed reducing housing costs through tax breaks and deregulation but has defended local housing restrictions that limit affordable housing development. His approach has drawn criticism for framing housing affordability as a social issue rather than an economic one, potentially hindering efforts to address the underlying problems.
Harris's housing-focused strategy highlights the critical role of affordable housing in the broader economic landscape, positioning it as a key issue in the upcoming election.
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